The Fair Work Commission last week completed its 2017-18 Annual Wage Review of the national minimum wage and minimum wages in modern awards.

Here’s what you need to know to get your affairs in order before the wages increase on 1 July 2018:

  • The current weekly national minimum wage has been increased from $694.90 to $719.20 – a 3.5% increase. This brings the new hourly national minimum wage to $18.93 (based on a 38-hour week).
  • Minimum wages in modern awards will also increase by 3.5% from 1 July 2018. This will impact 2.3 million Australians (22.7% of all employees) who have their pay set by these awards.
  • The Commission’s Review only confirms the increase in minimum wages in modern awards. The specific rates for each individual modern award will be released on a date before 1 July 2018.
  • The National Minimum Wage Order will contain a casual loading of 25% for award/agreement-free employees. The casual loading in modern awards will remain at 25%.
  • If you pay your employees at award level, the wage increases will take effect from the first full pay period commencing on or after 1 July 2018.
  • If you already pay above award level, you may not be required to increase your employees’ wages, provided your current wages remain above the rates as increased at 1 July 2018.

This wage increase is the highest we’ve seen since 2011 and will have a significant impact on employers of all sizes. It is therefore timely for employers to review their employment agreements to ensure they are compliant with the national minimum wage and minimum wages in modern awards.

We regularly assist clients across all industries in reviewing their payroll and HR documentation to ensure they reflect the rates of pay under relevant modern awards. This is a useful exercise for all employers and will mitigate the risk of underpayment claims, which have the potential to expose your business to penalties under the Fair Work Act 2009 (Cth). If you would like us to review your current arrangements, feel free to contact us.

For more information, please consult the Summary published by the Fair Work Commission, or alternatively, a full copy of the Annual Wage Review can be found here.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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